PROPERTY-RIGHTS AND TROPICAL DEFORESTATION

This paper presents two formal models which link poorly defined proper ty rights with wasteful deforestation. The first model demonstrates th at when property rights must be privately defended, most of the potent ial rental value of the land will be dissipated. The second model show s that even small probabilities of eviction will encourage squatters t o destroy long-lasting capital (such as forests) and follow unsustaina ble activities.